If a bank receives a new deposit of $10,000 . and the legal reserve requirement is 25 percent, then the potential new money that can be created by the banking system, including the initial deposit, is
a. $25,000
b. $2,500
c. $4,000
d. $40,000
e. $10,000
D
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Interlace, Inc produces and a unique soda. The company cannot price discriminate. The figure above shows Interlace's demand curve, marginal revenue curve, and marginal cost curve. Interlace, Inc is definitely
A) a perfectly competitive firm. B) not a perfectly competitive firm. C) a natural monopoly. D) None of the above answers is correct.
Positive analysis of economic policy
A) examines the economic consequences of policies but does not address the question of whether those consequences are desirable. B) examines the economic consequences of policies and addresses the question of whether those consequences are desirable. C) generates less agreement among economists than normative analysis. D) is rare in questions of economic policy.
An unanticipated decline in investment demand within the new classical model will cause
a. the price level to fall with no effect on output. b. output to fall with no effect on the price level. c. both the price level and output to fall. d. no change in either the level of price or output.
If the consumer price index (CPI) in Year X was 300 and the CPI in Year Y was 325, the rate of inflation for Year Y was:
a. 325 percent. b. 25 percent. c. 5 percent. d. 8 percent.